A local company focusing on smart card innovation is planning to auction a patent for a microlending smart card using the Internet as the medium. Dabco (Digital Audio and Broadcasting Corporation) has announced that it will open its Web site for scrutiny and due diligence procedures by potential bidders on Thursday, 22 March 2001.
"The technology will address one of the biggest gaps in the market - that population base that does not possess a significant asset base, is unbanked or underbanked, or would not normally have access to an established line of credit," says Dabco MD Cameron McKenzie.
The patent covers a micro-lending application based on a smart card where money is loaned against other services resident on the card. These services could be a funeral benefit fund, a medical aid savings scheme and/or an established line of credit. Money can be loaned directly from ATMs or loan agents.
McKenzie says that the interest in microlending from larger banks will foster innovation in the microlending industry. "The microloan market has been largely unregulated until now, but this is changing," says McKenzie. "The funeral benefit fund market has always been big, and medical aid is a very rapidly growing market. Medical aid schemes now also include a savings portion. Both these financial services provide an ideal base against which to loan money."
McKenzie maintains that by auctioning the right of use of the technologies, it opens up opportunities to a broader base of bidders, who will also have the opportunity to have direct input into the terms and conditions of lease.
"The patent will not be sold outright, but successful bidders will be given a sole-use period. We want potential bidders to visit the Web site, and then provide their input as to what they believe to be a tenable lease period, the conditions of the lease, and so on. We will then consider all input and present a final viewing with conditions clearly laid out that will benefit both the bidders and ourselves."
McKenzie points out that such interaction would not be possible via any other medium. "This clearly redefines auctioning, as the bidder places a value to the offering up-front before the auction takes place, and it is in our interest to take these suggestions seriously and incorporate them into our offering."
The Web site will include all legal documentation including patent registrations and body content, auction registration procedures and an e-mail link for input from visitors to the Web site. On the day of the auction, Park Village Auctions will manage the live bidding across the Internet.
Dabco has been involved in smart- and prepaid card technology for more than 15 years, with its first project in 1985 to assist the Budget Energy Controllers Suppliers Association (BECSA) to set standards for prepaid electricity meters.
"Because of our lightly regulated environment, South Africa has been an ideal place for developing and piloting smart card technology," says McKenzie. "Smart cards will play a pivotal role in bringing the advantages of technology to the majority of South Africans."
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